On Customized Goods, Standard Goods, and Competition

In this study, we examine firms' incentive to offer customized products in addition to their standard products in a competitive environment. We offer several key insights. First, we delineate market conditions in which firms will (will not) offer customized products in addition to their standard products. Surprisingly, we find that when firms offer customized products they are able to not only expand demand, but can also the prices of their standard products relative to when they do not. Second, we find that when a firm offers customized products it is a dominant strategy for it to also offer its standard product. This result highlights the role of standard products and the importance of retaining them when firms offer customized products. Third, we identify market conditions under which ex ante symmetric firms will adopt symmetric or asymmetric customization strategies. Fourth, we highlight how the degree of customization offered in equilibrium is affected by market parameters. We find that the degree of customization is lower when both firms offer customized products relative to the case when only one firm offers customized products. Finally, we show that customizing products under competition does not lead to a prisoner's dilemma.degree of product customization, mass customization, standard products, competition, game theory

From “Made in Hong Kong” to “Designed in Hong Kong”: searching for an identity in fashion

Homegrown fashion has long been struggling to set foot in the home market, as much as Hong Kong's shoppers pioneer global brands and Euro-American labels. Until recently, G.O.D., a homegrown brand, had captured a commercially viable home market with a distinctively Hong Kong style. This furniture-household goods-clothing store stocks East-West hybrid merchandise, ranging from dark wood chairs to bed linen, to t-shirts and tote bags. Its clothing collection has gained increasing popularity alongside recent expansion. Its profitable home market challenges the image of Hong Kong consumers as blind followers of international fashion and brand names, thus shedding light on Hong Kong fashion, which attempts to capture but fails to resonate with local audiences with an identity